The Company was formed as an online operator selling flights predominantly to Pakistan and other Asian destinations.
Initially, the Company traded from serviced offices in London.
The Company sourced potential clients through its website who were then directed to an outsourced call centre in Pakistan. Those clients wishing to proceed would be sent a booking form for completion at which time a deposit would be taken by the Company via a credit or debit card.
The Company would then purchase the ticket through an unconnected retail supplier for issue to the traveller. The Company’s income was derived from commissions earned on these transactions.
As the Company was deemed to operate on a ‘retail to retail’ basis, there was no requirement to be licensed by ATOL or ABTA.
Over time, the Company traded moderately successfully achieving a turnover at its peak of just below £1.3m.
Thereafter, sales began to fall due to the prevailing economic conditions and increased competition from similar providers who were able to undercut prices to increase their own market share.
The Company’s bankers Barclays Bank Plc suspended activity on their account for a few days having had complaints from clients that they had not received their refunds following customer flight changes or cancellations.
The director maintained that those clients had not in fact been entitled to a refund and had failed to read the Company’s terms and conditions. Having produced evidence to the bank’s satisfaction, their account was reinstated.
Following a similar situation, the Company’s account was again suspended for 2 weeks causing disruption to trade, as the Company could not pay for tickets or refund those clients who were correctly entitled.
This disruption escalated the Company’s difficulties and with cash flow challenged, further complaints were made and once again, the Company’s bank account was frozen.
Thereafter, the Company began to utilise the bank account of a connected company, but had never traded.
Despite this, the Company continued to be bombarded by complaints from clients, fuelled by bad publicity on social media platforms. The director struggled to resolve each and every issue within the timeframe expected and the Company was visited by an officer from Trading Standards who were conducting an enquiry following the high level of complaints.
Trading Standards, having seized and removed the Company’s computer and various files, informed the director that the outstanding complaints had to be resolved immediately and that Trading Standards would revert to them to report their overall findings.
Although to date no further action has been taken following their investigation, the damage that had already been done to the Company’s reputation resulted in a further decline in sales and unable to purchase tickets on behalf of clients who had already paid the Company in full.
The director sought professional from AABRS and the company was placed into Creditors Voluntary Liquidation.